New York’s new regulations on title insurance rates, expenses and charges – already facing a lawsuit from a title closer – has found opposition from three state lawmakers just days before the rule is set to take effect.
The second of two major title insurance overhauls promulgated this year, the regulation on rates is set to take effect Monday, Dec. 18. However, Assemblyman Kevin A. Cahill, chairman of the Assembly Insurance Committee, Assemblyman Dan Quart, who leads the Legislative Commission on Administrative Regulations Review, and Sen. James Seward, who chairs the Insurance Committee, have written the Department of Financial Services (DFS) to request a six-month hold on implementation.
The lawmakers say Insurance Regulation 208 will have a draconian impact on an industry that directly and indirectly employs tens of thousands in New York, according to a press release.
Cahill writes there are serious concerns including, “how insurers and agents will be able to market themselves following the final adoption, the requirement for insurers to restate six years of prior expenses and certify their compliance with the new regulations or agree to implement a five percent rate reduction for all categories of title insurance policies with no expiration date, as well as whether insurers, agents and title closers will be able to cover their costs due to the caps placed on certain categories of ancillary and discretionary fees. These concerns, it has been stated, will significantly destabilize an industry that has stability, reliability and predictability at its very core.”
The trio said they were behind aspects of the rule that would prohibit improper rate practices, excessive fees and unfair or deceptive marketing practices.
They are asking DFS Superintendent Maria Vullo to delay the enforcement of Regulation 208 until there is an opportunity for the legislature to schedule informational hearings. The lawmakers say their committees never were consulted on the new rules.